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2018 (2) TMI 1903 - AT - Income TaxDisallowance of premium paid on redemption of preference shares - nature of expenses - revenue or capital expenditure - loan and redeemable preference shares - HELD THAT:- We find that identical issue arose in assessee’s own case in A.Y. 2006-07 and 2007-08. The Co-ordinate Bench of the Tribunal while deciding the issue in A.Y. 2006-07 in favour of Revenue had relied on the decision of Hon’ble Calcutta High Court in the case of Hindustan Gas Vs. CIT [1978 (8) TMI 58 - CALCUTTA HIGH COURT] WHEREIN wherein clear distinction has been made between a loan and redeemable preference shares and held that any expenses incurred for issue for redeemable preference shares cannot be allowed as they are in the nature of capital expenditure. The decision in A.Y. 2006-07 was followed in A.Y. 2007-08. Disallowance of interest - no or low interest bearing advances given - excessive interest was made in earlier years even though the substantial deposits were given by assessee in earlier years - HELD THAT:- When the availability of interest free funds are far in excess of the amounts given as deposits, then as per the decision of Hon’ble Bombay High Court in the case of Reliance Utilities [2009 (1) TMI 4 - BOMBAY HIGH COURT] a presumption arises that the deposits are out of interest free funds and no interest bearing funds are utilized for making the deposits. The ratio of the aforesaid decision of Hon’ble Bombay High Court in the case of Reliance Utilities (supra) has been followed by the various benches of Pune Tribunal. Before us, Revenue has not brought on record any contrary binding decision in its support. We therefore following the ratio of the aforesaid decision rendered in the case of Reliance Utilities (supra) hold that in the present case, no disallowance of interest is called for. Thus, the grounds of the assessee are allowed. Disallowance of depreciation on non compete fees - Assessee had claimed depreciation on WDV of non compete fee treating the same as intangible asset - HELD THAT:- As no change in facts has be pointed out by Revenue. We therefore following the order of Co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2007-08 hold that assessee is eligible for depreciation. Therefore, the ground is allowed.
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